Oracle price hikes part of greater plan say experts

Oracle's decision to hike the price of some add-ons for its flagship database by about 40 percent was far from a random act, since the modules are crucial to getting the database to perform at the highest level, according to a pair of experts.

An official price list dated 1 July states that processor licences for Oracle's database diagnostic and tuning packs, as well as a database configuration management pack, are now $5,000(£3,050), up from $3,500(£2,1350) listed on a December 2008 price list.

The first two products help database administrators pinpoint and fix performance issues. The third tool is used for tasks such as monitoring database configuration changes and ensuring policy compliance.

"With every version of [Oracle's database], the dependency [on these products] has become greater and greater" due to increased complexity in customer environments, said Eliot Arlo Colon, president of Miro Consulting, a company that advises customers on Oracle software licence negotiations.

Not using the modules "is like giving someone a powerful engine, but not giving them the high-octane fuel to go with it," he said.

It was "a brilliant move" by Oracle to keep enterprise-edition database licences at US$47,500 per CPU but hike prices on the add-ons, since they will become virtually indispensable over time, Colon added.

Related

Another observer had a slightly different take, saying the price increases show Oracle is really trying to squeeze more revenue from the highest-end users of its database.

"Oracle is charging by CPU count," said Paul Vallée, founder and executive chairman of the Pythian Group, a Canadian database administration outsourcing company. "It doesn't really matter in terms of their revenue whether you're pushing [the CPUs] to the max, or have plenty of resources."

Therefore, the first group is more likely to buy the add-ons, he said: "Advanced instrumentation is incredibly useful when you're really straining your system's performance. ... To me, Oracle is trying to generate more revenue from people who are trying to push the gas pedal down."

It also doesn't matter to Oracle's bottom line whether you're storing extremely sensitive data, such as banking information, or something "run of the mill," Vallée said.

To that end, the configuration management module is aimed at "auditing and compliance of high-value systems," Vallée said. "What changed when, and who did it?"

Not every customer has such systems, but Oracle clients in areas such as banking and health care certainly do, he said.

Maybe only a certain percentage of Oracle users definitely need the tools, but it's not as if they don't have broader value, Vallée added.

His own engineers particularly like the diagnostics capabilities. "They're always annoyed when a customer doesn't buy it. If it's installed, they will use it," he said.

Meanwhile, Oracle's price increases didn't end there. The company also raised the cost of its Spatial database option, used for managing location data, to $17,500 per processor. The option was listed at $11,500 on the Dec. 1, 2008, list.

An Oracle spokeswoman declined to address the company's rationale for the price hikes.